Motton v. Chase Home Finance, LLC
4:10-cv-04994
S.D. Tex.Jul 13, 2012Background
- The case was removed from state court to federal court on diversity jurisdiction; Chase seeks dismissal and summary judgment for wrongful foreclosure, breach of contract, and emotional distress.
- Plaintiffs Motton and Evans allege foreclosure was wrongful and assert multiple contract-based and statutory claims related to the Note and Deed of Trust.
- Chase attached the Note and Deed of Trust to its summary judgment exhibits; plaintiffs failed to respond to both the motion to dismiss and the motion for summary judgment.
- Plaintiffs’ asserted MERS defendant was never served or appeared; Wilmington Trust Company never appears or is served, leaving jurisdiction lacking over those parties.
- Court previously granted a more definite statement, found the initial pleadings deficient, and allowed amendments which plaintiffs later field as the First Amended Complaint.
- Court dismisses with prejudice, concluding plaintiffs fail to plead plausible claims, and notes RESPA/HUD allegations do not create private contract or tort claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was there a viable wrongful foreclosure claim? | Motton/ Evans contend foreclosure defects and causation caused an inadequate sale price. | Chase argues lack of pleaded defect, inadequate price, and causation; notice issues do not establish a valid defect. | Dismissed; no plausible defect or causal link pleaded. |
| Does the First Amended Complaint state a breach of contract claim? | Plaintiffs claim breaches of multiple contract provisions in Note and Deed of Trust. | Many provisions are not plausibly pled or properly identified as breached; some claims rely on non-incorporated RESPA/HUD provisions. | Dismissed; insufficient factual pleading of contract breach and causation. |
| Can RESPA or HUD regulations support a private breach of contract claim? | Alleged RESPA/HUD violations breach contract duties. | Note/Deed do not incorporate RESPA/HUD; cannot support breach. | Dismissed; no contractual incorporation of RESPA/HUD. |
| Is the intentional infliction of emotional distress claim viable largely based on RESPA/foreclosure actions? | IOED claim arises from foreclosure-related conduct under RESPA/HUD allegations. | FHA/HUD violations do not give rise to private IOED claims and allegations are vague. | Dismissed; IOED claim lacks extreme/outrageous conduct and RESPA-based theory fails. |
Key Cases Cited
- Charter Nat’l Bank–Houston v. Stevens, 781 S.W.2d 368 (Tex. App.—Houston [14th Dist.] 1989) (wrongful foreclosure requires a defect causing grossly inadequate sale price)
- Tamplen v. Bryeans, 640 S.W.2d 421 (Tex. App.—Waco 1982) (failure to provide notice defects requires causal link to inadequate price)
- Roberts v. Cameron-Brown Co., 556 F.2d 356 (5th Cir. 1977) (HUD regulations and private action limits)
- Wornick Co. v. Casas, 856 S.W.2d 732 (Tex. 1993) (Restatement concepts in tort analysis)
- Twyman v. Twyman, 855 S.W.2d 619 (Tex. 1993) (extreme and outrageous conduct standard for IIED)
- Hoffman-La Roche, Inc. v. Zeltwanger, 144 S.W.3d 438 (Tex. 2003) (IOED standard and evidence requirements)